The arrival of the real-time New Payments Platform (NPP) in 2017 is set to revolutionise the payments landscape. Instead of waiting hours for a transfer or several days for a cheque to clear, Australians could be paid in a matter of seconds, 24 hours a day, seven days a week, 365 days a year.
The implications are significant for working capital, consumer peer-to-peer payments and future innovation in the payments sector.
Using NPP, selling a second-hand car may no longer be fraught with the trust question of handing over the keys before receiving the money. With a real-time payment infrastructure underpinning mobile transactions, the car dealer will be able to receive the money from the buyer via a funds transfer to their account. Moments later, they could check their account, via a mobile phone to verify receipt of the money, and hand over the keys.
IMPLICATIONS FOR BUSINESS
So what value-add will payments processed in a matter of seconds provide to businesses? What are the benefits of having real time access, enhanced data and new addressing capabilities?
For businesses with large working-capital cycles and funding exposures, NPP will offer enhanced efficiencies and create the potential to slow down payments to debtors until the very end of the invoice cycle, allowing companies to utilise funds more effectively.
On the receivables side of a transaction, the increased data sending capabilities NPP offers will facilitate improved reconciliation and payment visibility.
Moreover, with NPP based on a global industry standard message format, the possibilities on the receivables side start to grow, as businesses start to get a much better understanding of their payer behaviours; for example, the ability to send more information with each payment.
For parts of the financial services sector NPP will prove game changing. Imagine an insurance company that receives a claim from an individual and needs to make an urgent payment out. With almost immediate crediting of funds, NPP could streamline and expedite the payment process for both the insurer and claimant.